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Homework answers / question archive / An increase in money supply growth will lead to an overall decrease in interest rate if liquidity effect is greater than the income, price-level, and expected-inflation effect

An increase in money supply growth will lead to an overall decrease in interest rate if liquidity effect is greater than the income, price-level, and expected-inflation effect

Economics

An increase in money supply growth will lead to an overall decrease in interest rate if liquidity effect is greater than the income, price-level, and expected-inflation effect." Determine whether the above statement is TRUE or FALSE. Justify your answer with an appropriate diagram.

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